Prime Minister Dmitry Medvedev has warned Russia may shut its air corridors to Western airlines if the next round of European sanctions hit Russian oil and gas companies."If there are sanctions related to the energy sector, or further restrictions on Russia's financial sector, we will have to respond asymmetrically,Medvedev said in an interview with the Vedomosti newspaper,publishedon Monday.
EU ministers will gather on Monday to discuss new sanctions against Russia and are rumored to be introduced on Tuesday. The prime minister promised a strong retaliation if the West slaps Russia with more sanctions.
We could impose transport restrictions,Medvedev said, adding,"We believe we have friendly relations with our partners, and foreign airlines of friendly countries are permitted to fly over Russia. However, well have to respond to any restrictions imposed on us,"the prime minister said.
After sanctions hit Aeroflots low-cost subsidiary Dobrolet in late July, Medvedevdiscussedwith ministers the possibility of limiting, of even completely blocking, European flights to Asia that overfly Russia.
If Western carriers have to bypass our airspace, this could drive many struggling airlines into bankruptcy. This is not the way to go. We just hope our partners realize this at some point,he told Vedomosti.
Flying over Russian airspace saves Western airlines headed to Asia at least 4 hours of flight time, which adds up to about $30,000 per flight.
Lufthansa said it could potentially lose more than 1 billion in three months if it does not use Russian airspace. Lufthansa, along with British Airways and Air France, are the largest EU airlines. US airlines currently don't operate over Siberian airspace.
Many low-cost airlines have decided not to launch new routes to Russia, with the threat of sanctions possibly a factor. Last week Ryanair ditched plans to establish a Dublin-St. Petersburg route, and easyJet, another European-based airline, dropped its plans to develop a London-St. Petersburg service.
Medvedev didnt specify whether the blocked airspace would also apply to cargo and delivery companies, such as UPS and FedEx.
Oil at stake
EU sanctions, which will reportedly be introduced on Tuesday, willbanRussias three main oil companies- Rosneft, Gazprom Neft, and Transneft - from raising long-term (longer than 30 days) debt on European capital markets, according to theWall Street Journaland theFinancial Times.
Rosneft - Russias largest oil producer - wasaddedto the US sanctions list on July 16 and wasput onthe EU list on July 29. Russias largest independent natural gas producer, Novatek, also was added to the blacklist in July, along with a ban on the export of hi-tech oil equipment needed in Arctic, deep sea, and shale extraction projects to Russia.
Gazprom Neft is the oil subsidiary of Russian gas giant Gazprom.
Transneft is Russia's state-owned oil pipeline company that exports all of Rosnefts crude oil, and 56 percent of Russias crude exports.
Sanctions likely wont apply to privately-owned Russian oil groups such as Lukoil and Surgutneftegaz.
The EU will also reportedly follow Americas lead on banning the sale of weaponry from Russian companies that also supply the Russian military, the WSJreportedSunday. On July 16, the USblacklistedseveral defense sector companies include Almaz-Antey Corporation, the Kalashnikov Concern and Instrument Design Bureau, as well as companies such as Izhmash, Basalt, and Uralvagonzavod.
Sanctions are always a double-edged sword. Ultimately they end up backfiring and end up hurting those who are first to impose restrictions,Medvedev said.
The EU has agreed on the new sanctions but said they could be delayed or even cancelled if Russia shows willingness to resolve the conflict in Ukraine.
On Friday Kiev introduced aceasefireto calm fighting between the Ukrainian army and anti-government forces, but fighting and shellingcontinuedin the countrys east.
By RT
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